Forged signatures. … Contract terms you never agreed to. … Equipment you never signed up for.

If you run a business, it’s way too easy for an unscrupulous processor to rip you off. 

Consider this story. 

The owners of a Bellevue, Washington, pizzeria were told by their payment-processing rep there was no contract to prevent them from switching processors. So they switched. 

Some processors are just … what’s the word?

But it turns out there WAS a contract, with a three-year term and a liquidated-damages clause.

When they found out, the owners decided to proceed with the new processing company, but not close their original account until just before their contract ended. 

At this point they were notified in writing by their original processor that they were in breach of their contract by not processing and would have to pay damages of over $12,000 if they didn’t begin processing with them again.

So the merchant switched back to their original processor and waited out the contract. 

When the time came to make the switch permanent, the owner was in the process of getting the point-of-sale switched over, but it wasn’t scheduled to take effect until a few days after the end of the contract.

That was too long for the old processor. They stopped allowing transactions to process at noon on the last day of the contract. 


Way too many processors are either deceptive or, what’s the word? … Oh, right. It’s one we can’t use in a family blog post. 

Stories like these are legion. 


  • A metal-fabrication shop paying an 8% markup on “non-qualifying” charges (an opaque set of charges determined by the processor).
  • A music store spending $3,600 per year to lease four terminals when they could have bought those terminals for about half that amount.
  • A florist paying an effective rate of 8.8%, when a common effective rate for florists is about 2.5%.


Never lease a terminal

Fortunately, there are a few ways for merchants to fight back against processing’s bad actors.

Here are six simple tips. 

  1. Do your research. Check the processor’s Better Business Bureau score. Ask other business owners what processors they are using and what they like or don’t like about them.
  2. Never lease a terminal. It costs way more in the long run. Buy or rent.
  3. Never accept equipment you didn’t sign up for. Processors often stop by and drop off extra equipment for a business owner to use. Then they charge them for the equipment, which they never agreed to in their contract.
  4. Always request a copy of the finalized contract at the time of signing. This way a business owner can avoid a processor adding on terms or forging signatures.
  5. Look out for “too-good-to-be-true” rates. Often when a processor is offering a low rate, they’re adding on fees somewhere else.
  6. Don’t let a processor scare you into working with them. A processor may try to gain your business by saying you need to switch to new technology that’s compliant with a new industry regulation. That’s often a lie.

Okay. We feel better getting that out of our systems. Hope it helps!

Note: This post is the second of three on subscription-based payment processing. Part 2 is: This Industry Could Use a Good Blockbustering. Part 3 will be published next week.

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